Energy conservation a key to tenant retention.

The U.S. Department of Energy recently published a statistic of great interest to real estate professionals: energy demand in commercial real estate will increase an average of 17 percent each decade well into the twenty-first century. With demand increasing and the cost of energy fluctuating

Bender & Company, Inc., the Livingston, New Jersey-based real estate management and brokerage firm, in cooperation with Public Service Electric & Gas, New Jersey's largest utility, has implemented an innovative program aimed at providing the most cost-effective energy usage at Metropolitan Corporate Plaza in Woodbridge, a six-building complex owned by MetLife Real Estate investments. Two buildings at the corporate park have recently been retrofitted with new lighting equipment, which promises to be a significant energy saver.

Located on Route 1, Metropolitan Corporate Plaza is adjacent to the Garden State Parkway, close to the New Jersey Turnpike and I-287. Although the MetLife facility is well-situated, the real estate professionals at Bender & Company recognized that prime location is not the only factor current and prospective clients consider. An office complex must offer a fundamental level of responsiveness to tenants desire for value and efficiency.

Public Service Conservation Resource Corporation (PSCRC), a division of Public Service Electric & Gas, started a new energy program known as a Standard Offer. Bender & Company was the first to tailor the concept to a multi-tenant office building. Geared toward managing the demand for electricity, the program offers rewards for additional electricity savings.

In each of the two building's 70,000 square feet of occupied space, MetLife reduced electricity consumption by 110,000 kilowatts annually - a reduction in consumption of 35 percent. PSCRC acts as the interface for the Standard Offer, monitoring light levels, producing technical reports and handling all billing.

With program details ironed out, the work contracts were signed the first quarter of 1993. The Roberts Group, an electrical contracting firm, was brought in to handle all the technical details of the program. The contractor provided the hardware, including new super-efficient lighting fixtures which use two bulbs instead of four; electronic ballast to control energy flow; and a reflector kit to provide lighting balance. The important point is that the installed hardware provides the same amount of light for two-thirds the energy use. All the installations for both buildings were completed after regular business hours and only took six weeks.

What makes this program even more special is how it is financed. Bender & Company and Metropolitan Life signed a long-term contract with Public Service Conservation Resource Corporation which agreed to finance the $165,000 lighting system. Under this contract, PSE&G underwrites the full capital cost of the system because it anticipates significant energy savings over time. That "saved" energy is then sold to other customers at a rate that offsets the capital costs of the project.

The program has more than lived up to expectations. The monthly savings have been estimated at 17 percent - a total of $60,000 a year in operating costs.

"Bender & Company has introduced a program that enhances this complex's competitiveness in a difficult real estate market," said Patricia Curtin-Munley, assistant vice president and asset manager for MetLife Real Estate Investments. "Their work with PSE&G on designing such an innovative program has made the facility a model for energy conservation in multi-tenant office buildings."

Controlling energy costs in a multitenant facility can be one of the most daunting aspects of property management. By adapting the energy program to Metropolitan Corporate Plaza, Bender & Company Inc. is demonstrating its commitment to providing the most cost-effective business environment to the owners as well as existing and prospective tenants.

Over the coming years, Bender & Company aims to make the program available to other properties it manages across the state. By making these commercial facilities state-of-the-art in energy conservation technology, we're helping to attract companies that want location and value combined. In the meantime, Metropolitan Corporate Plaza will be on the leading edge of commercial office building energy conservation.